The New Local Government Network (NLGN) has spent 21 years working with local authorities and are experts in how this branch on the public sector works and what this means for companies who want to work with it. Claire Mansfield, research manager at NLGN, tells us more.
Please can you tell me a bit about NLGN and the work that you do there?
We are a 21 year old think tank and membership organisation. We have two parts of the organisation. We have network of 40 councils and eight corporates and social enterprises. The idea when we were set up was to rethink the conversation around local government, to get the public sector talking to private sector to exchange ideas.
My role is on the other side of the organisation in the research team. We research different topics around local government and that can be quite varied. We have one big set of research for this coming year which is our Change Maker research, looking at how councillors, communities and officers within councils are all changing in their relationship with each other and how the culture within these organisations will need to change. For instance, in local authorities the culture can be quite hierarchical, so you get lots of bright young things who join councils and want to change the world getting drowned out in bureaucracy and being told that they’re not at a level to change things. It’s about looking at things like that within councils and local communities and breaking down barriers.
We hear a lot from businesses trying to sell to local government. Are there any changes you’re seeing at the moment that you think businesses should be getting more involved with?
There’s been an overall trend since the funding cuts in 2010 for local authorities to try to think more entrepreneurially and work with businesses, but they obviously don’t have money so they’re looking for ways of innovating. They’re definitely more interested in partnering up with other organisations, whether it’s private sector or other public sector organisations, which is good news for businesses. Every sector within local authorities have their own problems. We just did a report on public health, which was looking at how public health teams need to work more with economic development teams and with local businesses. I think that businesses could play into early intervention and prevention aspects of local authorities, having a role throughout councils and in each department.
You said that you have eight members who aren’t councils. What kind of things do they do in this space?
We have companies that do infrastructure, we have law firms, we have social finance, we have govtech, so it’s people who want to have more of a conversation with local government. They are interested in thought leadership in that kind of space and how you can exchange knowledge and better work with each other - how they can understand local government and how local government can understand businesses.
It can be quite stark divide. I’ve seen it sometimes when I’ve chaired debates. I did one with a large infrastructure company looking at social value. We had councils and we had private sector and they really didn’t see things from each other’s point of view because the private sector saw social value in quite a two dimensional way and councils saw another organisation trying to get their money. You could see the different cultures at play and I think that’s what they can get from the NLGN network, getting to know a different culture and getting to know how to speak to a different organisation. The private sector’s not just out for money and the councils aren’t just out to spend money.
One of the pieces of advice that we hear a lot for businesses who want to sell to local government is that businesses should get involved with buyers and get to know more about them long before a tender comes up. Are there any events or schemes you can think of that would be a good way of doing that?
Well, you could join NLGN!
To sell it’s better to have a relationship with a council. Increasingly we’re talking about how local authorities commission pieces of work. Ideally, businesses that are bidding would be part of the process of commissioning a lot earlier on so they can help shape the services, not just shape it to the service that they can deliver, but because they do have knowledge that can feed into creating a greater service and knowing what’s possible. You don’t want councils putting out tenders that just can’t be answered. Then people try and answer them and they retrofit their product or service to the specifications and it just doesn’t work. If they can be part of that commissioning process, that’s great, although that is something local government needs to learn, how to open up the commissioning process and not do it so fast.
In terms of events, there are lots of events or events that councils themselves would be running or we’ve got our annual conference in February. Something like that would be a good opportunity to meet people, not on the level of ‘I’ve got something to sell you’, more as a meeting of minds.
Have there been any policy changes in response to the cuts that have resulted in growth in certain sectors?
The cuts have been so severe, 40%-45%, that now the only things councils can spend money on are social care and other statutory services. Non-statutory services, the ‘nice to haves’ like parks and day centres, have been cut. However, councils are probably up for more innovative thinking. If you have social value or you are a social enterprise then you can give something else back to the community. At the same time though, people always complain to us that councils only give contracts to very big organisations. They work with huge businesses because they seem less risky. There’s also a time pressure because councils would ideally like to tailor tenders more but if you’ve only got a few weeks and if you’ve only got one member of staff when you used to have ten.
We did a report a few years ago called ‘Smart Budgeting’ which looked at how councils budget. When they come up with their budgets they have different lines, different departments get a certain amounts. With the cuts they have tended to what we call ‘salami slice’ those budget lines, so they’ve all reduced by 40% or 20% or whatever, rather than putting all the money back into a pot and rethinking how you distribute it. What’s happened is that some services that didn’t have a huge budget to start off with have been cut to the extent that they are now left with a miniscule amount that they can’t really do very much with. We argue that you would be better off putting everything back into a pot and rethinking what your priorities are within a local authority. Because most councils haven’t started thinking differently, I don’t think there are more businesses that are getting involved, it’s just the same businesses that are getting less money for what they were doing.
Going back to what you said earlier about social value, what would you say are the actual differences are between how businesses see it and how councils see it?
I think councils are kind of mistrusting about the way businesses try to tick boxes, whereas businesses maybe don’t get to the heart of what that social value means to councils. Where there is a difference in social value that we identified at that round table was, depending on the type of business. When you’re talking to people who do, for example, infrastructure, the social value is really easy to measure because it tends to be things like ‘we will have ten apprenticeships’. My hunch is that councils have been approaching social value and the social value act with those big organisations that do waste management or infrastructure so social value’s very easy to manage. I think councils struggle when it’s kind of inherent anyway, because how do you measure something that’s so much a part of what an organisation offers. If you’re commissioning work in the voluntary and community sector and you’ve got a social value section in your tender, how do you judge which charity is best?
You said that there was a problem with time-pressured councils just going for the large, familiar businesses. Are there any schemes that you’re aware of that are trying to open this up to other businesses?
Things like devolution and the local industrial strategies that came out, so I wonder if we will see a focus on reinvesting back in an area, so looking at social enterprises, whether there will be more of a climate to try and tie them into local industrial strategies or devolution. They don’t have to, essentially you should commission who you think will deliver the work best, but there might be a bit more of a sense of that. All these words that are going around like ‘inclusive growth’ and ‘local industrial strategies’. I wonder whether that focus on place and redistributing wealth, and the North/South divide, if you fit into that as a business it could help you when dealing with councils. Maybe it’s not so much to do with social value, maybe it’s that when you’re writing a bid, if you can write about how you can contribute to what’s going on that would be good.
Know their corporate strategy, make sure you throw those words in. It’s like applying for a job, know who you’re applying to rather than just thinking that your bid will lead to a sale.
Is NLGN working on anything in particular at the moment that you’d like to share?
The Change Maker project I mentioned at the beginning is the big thing. When we’ve been talking about how businesses interact with government, I think that culture change will be important, because local authorities traditionally can put up quite a barrier. I think if we can get local authorities to open up within their culture and take more risks, you’ll see local authorities working with other branches of the public sector, businesses and the voluntary sector.
Thank you very much for your time.